VW Stands By CEO Mueller

20 Jan 2016

Volkswagen AG’s supervisory board stood by Chief Executive Officer Matthias Mueller after he sparked a media firestorm in the US last week that complicated efforts to clear up the diesel-emissions scandal.

Mueller’s role was never under discussion and any speculation to the contrary will be “emphatically rejected,” a spokesman for the German carmaker said in an e-mailed statement on Tuesday, following a meeting between the CEO and supervisory board leaders. At the gathering, Mueller confirmed that he believes the company breached legal codes and overstepped ethical boundaries when it cheated on diesel emissions.

Mueller drew criticism after telling a National Public Radio interviewer that Volkswagen “didn’t lie” when first asked about irregularities between real-life and test emissions in its diesel cars. In a follow-up interview, Mueller apologized and blamed his initial statements on noisy surroundings. The comments came before Mueller’s first meeting with US regulators in the four-month-old crisis.

Volkswagen has been struggling to find a path out of the scandal in the US, where so far it’s failed to get regulatory approval for a fix for diesel cars it rigged to pass emissions tests. The company admitted last September that it had deceived consumers and regulators since 2009 in a scandal involving 11 million vehicles worldwide. A recall in Europe has since started.

VW plans to hire more external experts to help resolve the complex talks with regulators in the US over remedies for manipulated cars in the country, the company said in a separate statement. The supervisory board’s presidium, one of four standing committees, discussed the profile for candidates at Tuesday’s meeting and a decision will be made in the coming weeks, it said.

In December, the automaker hired Ken Feinberg, who ran funds to provide restitution to victims of General Motors Co.’s faulty ignition switches and BP PLC’s oil spill in the Gulf of Mexico, to run a similar program over claims related to diesel emissions. Germany’s Sueddeutsche Zeitung reported Monday that VW plans to hire former FBI chief Louis Freeh but his appointment faces resistance from the company’s powerful labor unions, according to a report by DPA.

Company Investigation

Volkswagen is still looking into how the deception was originated and maintained for so many years. The company said Tuesday that an investigation being run by US law firm Jones Day has made significant strides in recent weeks, and a report is planned for the carmaker’s shareholder meeting in April.

Amid the uncertainty, some buyers have been deterred from Volkswagen’s vehicles. Its global sales last year declined 2% to 9.93 million vehicles. The manufacturer has said 2016 will be no less challenging. Halting sales of cars with diesel engines in the US triggered a slump in VW-brand deliveries in North America.

To help lead a recovery, the automaker appointed Hinrich Woebcken, a former BMW AG executive, as the chief of the North America region effective April 1. Woebcken will oversee Michael Horn, who heads Volkswagen’s US unit. The previous designated chief, Winfried Vahland, turned down the job last year in the wake of a management revamp triggered by the emissions scandal.